MONTGOMERYVILLE, Pa., Aug. 3 /PRNewswire-FirstCall/ -- PhotoMedex, Inc. today announced the results of its operations for the second quarter ended June 30, 2006. Revenues for the second quarter ended June 30, 2006 were $8,223,743, as compared to the revenues for the second quarter ended June 30, 2005 of $8,055,173.
XTRAC(R) procedures billed in this year’s second quarter increased 55 percent from 2005 second quarter levels. On a sequential basis, in the second quarter of 2006, XTRAC(R) revenue rose 25 percent from the levels reported in the first quarter of 2006.
Jeffrey O’Donnell, PhotoMedex CEO and President, commented, “We are encouraged by continued growth in XTRAC procedures in this year’s second quarter. Our marketing efforts are having a positive impact in our target areas, and with increased production levels, our margins have improved as planned. We are pleased with the progress made in the second quarter and are confident that we are on track to achieve our income prior to non-cash charges goal for the year.”
The net loss for the quarter ended June 30, 2006 was $1,339,931, or $(0.03) per fully diluted share, compared to a net loss for the second quarter of 2005 of $660,651, or $(0.01) per fully diluted share. This year’s second quarter net loss included charges for stock-based compensation expense of $431,768 and depreciation and amortization of $1,037,416. Last year’s second quarter loss included depreciation and amortization of $806,358. There was no employee stock-based compensation expense recorded for the three months ended June 30, 2005 because the adoption of the new accounting standard FAS 123R occurred on January 1, 2006. A reconciliation of non-GAAP financial measures used in this news release to GAAP financial measures, and a presentation of the most directly comparable GAAP financial measures is included below in the section on non-GAAP Measures.
Revenues for the six months ended June 30, 2006 were $16,304,905, as compared to the revenues for the six months ended June 30, 2005 of $13,038,505.
The net loss for the six months ended June 30, 2006 was $3,690,192, or $(0.07) per fully diluted share, compared to a net loss for the first six months of last year of $1,788,763, or $(0.04) per fully diluted share. This year’s net loss included charges for stock-based compensation expense of $898,559 and depreciation and amortization of $2,054,511. Last year’s loss for the first six months included depreciation and amortization of $1,332,754. There was no employee stock-based compensation expense recorded for the six months ended June 30, 2005.
As of June 30, 2006, the Company had cash and cash equivalents of $4,300,509, including restricted cash of $168,167.
Non-GAAP Measures
To supplement PhotoMedex’s consolidated financial statements presented in accordance with GAAP, PhotoMedex has begun providing certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP net loss and non-GAAP loss per fully diluted share.
PhotoMedex’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results.
These non-GAAP measures are provided to enhance investors’ overall understanding of PhotoMedex’s current financial performance and provide further information for comparative information due to the adoption of the new accounting standard FAS 123R.
Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of its core operating results and business outlook. In addition, PhotoMedex believes non-GAAP measures that exclude stock-based compensation expense enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:
For the three months For the six months ended June 30, ended June 30, 2006 2005 2006 2005 Net loss $(1,339,931) $(660,651) $(3,690,192) $(1,788,763) Adjustments Stock-based compensation per FAS 123R 431,768 -- 898,559 -- Depreciation and amortization 1,037,416 806,358 2,054,511 1,332,754 Other non-cash charges 14,718 91,937 87,682 263,548 Total adjustments $1,483,902 $898,295 $3,040,752 $1,596,302 Non-GAAP adjusted income (loss) $143,971 $237,644 $(649,440) $(192,461) Shares used in computing basic and fully diluted net loss per share 52,622,189 50,859,562 52,399,143 46,322,904 Non-GAAP adjusted loss per fully diluted share $0.003 $0.005 $(0.012) $(0.004) Conference Call and Webcast Details
PhotoMedex will hold a conference call to discuss the Company’s second quarter 2006 results on Thursday, August 3 at 4:30 p.m. Eastern Daylight Savings Time.
To participate in the conference call, dial 877.502.9274 (and confirmation code # 4045966) approximately 5 to 10 minutes prior to the scheduled start time. If you are unable to participate, a digital replay of the call will be available from Thursday, August 3, from 7:30 p.m. ET until midnight on Wednesday, August 16, by dialing 888.203.1112 and using confirmation code # 4045966.
The live broadcast of PhotoMedex’s quarterly conference call will be available online with an accompanying slide presentation by going to www.photomedex.com and clicking on the link to Investor Relations, and at www.streetevents.com. The online replay will be available shortly after the call at those sites.
About PhotoMedex
PhotoMedex is engaged in the development of proprietary excimer laser and fiber optic systems and techniques directed toward dermatological applications, with FDA approval to market the XTRAC(R) laser system for the treatment of psoriasis, vitiligo, atopic dermatitis and leukoderma. In addition, the Company provides contract medical procedures to hospitals, surgi-centers and doctors’ offices, offering a wide range of products and services across multiple specialty areas, including dermatology, urology, gynecology, orthopedics, and other surgical specialties. The Company is a leader in the development, manufacturing and marketing of medical laser products and services. In addition, as a result of the merger with ProCyte, PhotoMedex now develops and markets products based on its patented, clinically proven Copper Peptide technology for skin health, hair care and wound care. PhotoMedex sells directly to dermatologists, plastic and cosmetic surgeons, spas and salons and through licenses with strategic partners into the consumer market, including a long-term worldwide license agreement with Neutrogena(R), a Johnson & Johnson company. ProCyte brands include Neova(R), Ti-Silc(R), VitalCopper(R), Simple Solutions(R) and AquaSante(R).
SAFE HARBOR STATEMENT
Some paragraphs of this press release, particularly those describing PhotoMedex’ strategies, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While PhotoMedex is working to achieve those goals and strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including difficulties in marketing its products and services, need for capital, competition from other companies and other factors, any of which could have an adverse effect on the business plans of PhotoMedex, its reputation in the industry or its expected financial return from operations. Factors such as these could have an adverse effect on PhotoMedex’ results of operations. In light of significant uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by PhotoMedex and its subsidiaries that they will achieve such forward-looking statements.
Contact: Allen & Caron PhotoMedex, Inc. Matt Clawson (investors) Dennis McGrath, CFO 949-474-4300 215-619-3287 matt@allencaron.cominfo@photomedex.com TABLES FOLLOW PHOTOMEDEX, INC. CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005* Revenues $8,223,743 $8,055,173 $16,304,905 $13,038,505 Cost of sales 4,224,190 4,222,190 8,932,088 6,854,558 Gross profit 3,999,553 3,832,983 7,372,817 6,183,947 Operating expenses: Selling, general and administrative (2) 4,946,458 4,197,443 10,306,636 7,418,419 Research and development and engineering 255,179 327,939 497,383 514,910 5,201,637 4,525,382 10,804,019 7,933,329 Loss from continuing operations before interest expense, net (1,202,084) (692,399) (3,431,202) (1,749,382) Other income -- 88,667 -- 88,667 Interest expense, net (137,847) (56,919) (258,990) (128,048) Net loss (1),(2) $(1,339,931) $(660,651)(1) $(3,690,192) $(1,788,763) Basic and diluted net loss per share $(0.03) $ (0.01) $(0.07) $(0.04) Shares used in computing basic and diluted net loss per share 52,622,189 50,859,562 52,399,143 46,322,904 (1) Includes depreciation and amortization $1,037,416 $806,358 $2,054,511 $1,332,754 (2) Includes share-based compensation expense $431,768 $-- $898,559 $-- * PhotoMedex, Inc. acquired ProCyte Corporation (“ProCyte”) on March 18, 2005 and, as such, the operating results of ProCyte for the six months ended June 30, 2005 include activity from ProCyte from March 19, 2005 through June 30, 2005. PHOTOMEDEX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2006 December 31, 2005 Assets Cash and cash equivalents $4,300,509 $5,609,967 Accounts receivable, net 4,864,419 4,651,080 Inventories 8,162,387 8,047,444 Other current assets 1,146,040 621,372 Property and equipment, net 7,660,217 7,044,713 Intangibles and other assets 23,321,983 22,701,030 Total Assets $49,455,555 $48,675,606 Liabilities and Stockholders’ Equity Accounts payable and accrued liabilities $5,736,808 $5,171,387 Other current liabilities 773,032 670,740 Bank and lease notes payable 6,389,089 4,416,451 Stockholders’ equity 36,556,626 38,417,028 Total Liabilities and Stockholders’ Equity $49,455,555 $48,675,606 PHOTOMEDEX, INC. CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, 2006 2005 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(1,339,931) $(660,651) $(3,690,192)$(1,788,763) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,037,416 806,358 2,054,511 1,332,754 Stock-based compensation expense related to employee options and restricted stock 431,768 -- 898,559 -- Provision for bad debts -- 108,712 58,246 276,124 Other 14,718 (16,775) 29,436 (12,576) Changes in assets and liabilities: (Increase) decrease in: Accounts receivables (126,936) 90,926 (271,585) 232,694 Inventories (556,675) 181,735 (27,785) (587,401) Prepaid expenses and other assets 273,813 243,184 367,049 435,313 Increase (decrease) in: Accounts payable & other accrued expenses (581,158) (1,676,471) 150,078 (2,416,410) Deferred revenues 64,615 (23,074) 170,707 (105,757) Net cash used in operating activities (782,370) (946,056) (260,976) (2,634,022) CASH FLOWS FROM INVESTING ACTIVITIES: (1,042,222) (1,446,288) (2,132,755) 3,789,271 CASH FLOWS FROM FINANCING ACTIVITIES: 498,622 617,743 1,123,037 473,249 NET INCREASE IN CASH (1,325,970) (1,774,601) (1,270,694) 1,628,498 CASH, AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,458,312 7,287,916 5,403,036 3,884,817 CASH, AND CASH EQUIVALENTS, END OF PERIOD 4,132,342 5,513,315 4,132,342 5,513,315 RESTRICTED CASH 168,167 206,802 168,167 206,802 TOTAL $4,300,509 $5,720,117 $4,300,509 $5,720,117
The following table compares unaudited XTRAC(R) domestic treatment activity and revenues for the last ten quarters:
(000’s) Quarterly Billed Unbilled Treatments $ tx# Rate/tx tx# 2Q06 22,844 $1,409.8 21,365 $65.99 1,479 1Q06 19,933 $1,220.8 18,760 $65.07 1,173 4Q05 17,015 $1,020.0 15,264 $66.82 1,751 3Q05 15,690 $916.0 13,876 $66.01 1,814 2Q05 15,503 $901.0 13,811 $65.24 1,692 1Q05 12,418 $750.0 11,304 $66.35 1,114 4Q04 14,499 $846.0 12,640 $66.93 1,859 3Q04 13,841 $840.0 12,672 $66.29 1,169 2Q04 12,688 $821.0 11,878 $69.12 810 1Q04 10,737 $675.0 9,647 $69.97 1,090 (000’s) (000’s) Quarter Deferred Recognized $ tx# $ tx# 2Q06 $(82) (1,237) $1,328.2 21,607 1Q06 $(161) (2,476) $1,059.6 17,457 4Q05 $(64) (984) $956.0 16,031 3Q05 $103 1,556 $1,018.7 17,246 2Q05 $(12) (187) $889.0 15,316 1Q05 $(116) (1,753) $634.0 10,665 4Q04 $194 2,760 $1,040.0 17,259 3Q04 $105 1,597 $945.0 15,438 2Q04 $(102) (1,472) $719.0 11,216 1Q04 $(125) (1,775) $550.0 8,962
PhotoMedex, Inc.
CONTACT: Investors, Matt Clawson of Allen & Caron, +1-949-474-4300,matt@allencaron.com, for PhotoMedex, Inc.; or Dennis McGrath, CFO ofPhotoMedex, Inc., +1-215-619-3287, info@photomedex.com
Web site: http://www.photomedex.com/
